Latest news with #OICCI
Arab News
2 days ago
- Business
- Arab News
Heavy taxes, inconsistent policies forcing multinationals to leave Pakistan, trade representative says
KARACHI: Many multinational corporations (MNCs) have 'packed up' and left Pakistan in recent years because of the country's 'inconsistent policies and a complicated tax regime,' Overseas Investors Chamber of Commerce & Industry (OICCI) CEO Abdul Aleem said this week. Prime Minister Shehbaz Sharif's government has imposed as much as 29 percent taxes on corporate incomes to increase the cash-strapped country's revenues with the help of International Monetary Fund (IMF) that wanted Islamabad to tax incomes from agriculture, real estate and retail sectors in the fiscal year 2025-26 budget that Finance Minister Muhammad Aurangzeb is expected to present on June 10. 'Basically the issue with our members and which generally the foreign investors are facing is that the consistency of policy is not there,' Aleem told Arab News in an interview on Friday. Pakistan's existing tax regime is 'very complicated' and leads to a lot of litigations while abrupt changes in the government's corporate policies have seen global giants like Shell plc., TotalEnergies SE and some pharmaceutical firms divest their shares in the country, the world's fifth most populous nation and thus a big consumer market. The OICCI is the biggest taxpayer in Pakistan that has been paying Rs15 billion ($53.2 million) daily in taxes, which is about one-third of the total taxes the nation collects in a year, according to its CEO. Its members include Pepsi-Cola International (Private) Limited, Pakistan Kuwait Investment Company, Citibank N.A., Toyota's Pakistan unit Indus Motor Company Ltd. and Maersk Pakistan (Pvt.) Ltd. 'Many of the companies packed up a few years back,' Aleem said. TotalEnergies SE sold 50 percent of its shareholding in Total PARCO Pakistan Ltd. to Gunvor Group last year, while Shell plc sold a majority stake in its Pakistan business to Wafi Energy LLC of Saudi Arabia in November 2023. Higher taxes on the incomes of corporate and salaried persons is another area of concern for foreign investors who directly or indirectly employ around one million Pakistanis. Sharif's government has been charging businesses as much as 10 percent as super tax, 18 percent sales tax, and 29 percent as corporate tax this fiscal year, which ends on June 30. 'In comparison to the region, it is higher,' Aleem said about the corporate tax, which he said should be slashed to 25 percent through a one percent annual reduction. The 18 percent sales tax too should be reduced on the same pattern to 15 percent that will align the levy to what is being paid in the region, according to the OICCI CEO. The 10 percent super tax should be abolished in the next three years so that the MNCs operating in Pakistan could be more competitive. The government should provide relief to the heavily-taxed salaried persons in FY26 budget to stop the so-called brain drain from the country. Record number of skilled individuals and professionals deserted Pakistan for other countries and inflicted a huge loss on the South Asian nation in the form of human capital and resources, Bloomberg News reported in October. The Pakistani government, which is charging salaried persons as much as 35 percent tax on incomes, has said it wants to provide some relief to them in the new budget, which will take effect from July. 'The salary taxes in Pakistan are very high. It should be reduced immediately because it is having an impact,' the OICCI chief said. 'It is very necessary that we get good quality people to remain in the country and work for the industry as well. And there should be an element of fairness in taxation.' In recent years, PM Sharif's government has been trying to attract foreign direct investment (FDI) into the country and has established a Special Investment Facilitation Council (SIFC), a civil-military forum, to rid foreigners of bureaucratic hurdles. However, the investment inflows have been dismal and could not increase beyond $3 billion a year. 'The government has to facilitate the existing foreign investors by not only streamlining the tax rates but also streamlining the systems, tax system, compliance system so that more and more foreign investment is attracted,' Aleem said. The OICCI, he said, was the largest foreign investor in Pakistan and had brought about $20 billion fresh FDI besides reinvesting more than $23 billion in Pakistan over the last one decade. 'We are the largest taxpayers and I think there is need to rationalize the tax regime,' Aleem said, adding that the government could increase Pakistan's 10.6 percent tax-to-GDP ratio to 14 percent by taxing services, agriculture and trades. The OICCI chief said the government should decrease its expenses by 'offloading' loss-making, state-owned enterprises, including the Pakistan International Airlines, as well as plug leakages in its revenue from tobacco industry. The two MNCs, Pakistan Tobacco Company Ltd. of British American Tobacco Group and Phillip Morris International, were paying 99 percent taxes while their market share stays at 53 percent. 'That tells you that the other 47 percent or half of the industry is not paying its tax which is Rs300 billion,' he said. 'There is need for more robust action from the authorities.' Arab News contacted Qamar Sarwar Abbasi, spokesperson for the finance ministry, regarding the concerns raised by the OICCI official, but he did not offer any comment.
Business Recorder
3 days ago
- Business
- Business Recorder
Oil sector in Pakistan: Minister outlines key investment opportunities
KARACHI: Federal Minister for Petroleum Ali Pervaiz Malik outlined key investment opportunities in upstream exploration, pipeline development, and downstream processing, aligned with the global shift toward cleaner energy in a meeting with the Overseas Investors Chamber of Commerce and Industry (OICCI). OICCI held a detailed interactive session with Ali Pervaiz Malik, attended by senior business leaders from both local and multinational companies. Discussions focused on Pakistan's energy priorities and the path to long-term economic stability. The Minister reaffirmed the government's commitment to structural reforms, accelerated policy execution, and enhanced industry engagement. He cited recent resolution of refinery-sector challenges as a positive example of collaborative progress. During the meeting, the Minister outlined key investment opportunities in upstream exploration, pipeline development, and downstream processing, aligned with the global shift toward cleaner energy and invited the foreign companies for investment. He further highlighted the recent FDI-related successes in attracting foreign investment in the mining sector, which aim to unlock the country's untapped natural resources and drive future exports and industrial diversification. Yousaf Hussain, President of OICCI and CEO of Faysal Bank, emphasised the importance of policy consistency, technocratic execution, and a joint, collaborative roadmap to achieve deep-rooted economic stability and sustainable growth. He noted that closer engagement between the government, OICCI, and industry in both policy formulation and execution will be essential to delivering results and strengthening investor confidence. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business
- Business Recorder
Oil sector: Minister outlines key investment opportunities
KARACHI: Federal Minister for Petroleum Ali Pervaiz Malik outlined key investment opportunities in upstream exploration, pipeline development, and downstream processing, aligned with the global shift toward cleaner energy in a meeting with the Overseas Investors Chamber of Commerce and Industry (OICCI). OICCI held a detailed interactive session with Ali Pervaiz Malik, attended by senior business leaders from both local and multinational companies. Discussions focused on Pakistan's energy priorities and the path to long-term economic stability. The Minister reaffirmed the government's commitment to structural reforms, accelerated policy execution, and enhanced industry engagement. He cited recent resolution of refinery-sector challenges as a positive example of collaborative progress. During the meeting, the Minister outlined key investment opportunities in upstream exploration, pipeline development, and downstream processing, aligned with the global shift toward cleaner energy and invited the foreign companies for investment. He further highlighted the recent FDI-related successes in attracting foreign investment in the mining sector, which aim to unlock the country's untapped natural resources and drive future exports and industrial diversification. Yousaf Hussain, President of OICCI and CEO of Faysal Bank, emphasised the importance of policy consistency, technocratic execution, and a joint, collaborative roadmap to achieve deep-rooted economic stability and sustainable growth. He noted that closer engagement between the government, OICCI, and industry in both policy formulation and execution will be essential to delivering results and strengthening investor confidence. Copyright Business Recorder, 2025
Business Recorder
4 days ago
- Business
- Business Recorder
Energy sector: Key investment opportunities outlined
KARACHI: Federal Minister for Petroleum, Ali Pervaiz Malik outlined key investment opportunities in upstream exploration, pipeline development, and downstream processing, aligned with the global shift toward cleaner energy in a meeting with the Overseas Investors Chamber of Commerce and Industry (OICCI). The OICCI held a detailed interactive session with Federal Minister for Petroleum, Ali Pervaiz Malik, attended by senior business leaders from both local and multinational companies. Discussions focused on Pakistan's energy priorities and the path to long-term economic stability. The Minister reaffirmed the government's commitment to structural reforms, accelerated policy execution, and enhanced industry engagement. He cited recent resolution of refinery-sector challenges as a positive example of collaborative progress. During the meeting, Minister petroleum outlined key investment opportunities in upstream exploration, pipeline development, and downstream processing, aligned with the global shift toward cleaner energy and invited the foreign companies for investment. He further highlighted the recent FDI-related successes in attracting foreign investment in the mining sector, which aim to unlock the country's untapped natural resources and drive future exports and industrial diversification. Yousaf Hussain, President of OICCI and CEO of Faysal Bank, emphasized the importance of policy consistency, technocratic execution, and a joint, collaborative roadmap to achieve deep-rooted economic stability and sustainable growth. He noted that closer engagement between the government, OICCI, and industry. in both policy formulation and execution. will be essential to delivering results and strengthening investor confidence. Copyright Business Recorder, 2025
Arab News
23-05-2025
- Business
- Arab News
Pakistan business confidence improves by 16% points, survey reveals
KARACHI: Business confidence has significantly improved among investors in Pakistan that is largely attributed to macroeconomic stability, declining inflation and anticipated improvements in business conditions over the next six months, a survey by Pakistan's Overseas Investors Chamber of Commerce and Industry (OICCI) revealed on Thursday. The Business Confidence Index (BCI) Survey – Wave 27, conducted across Pakistan in March-April 2025, shows the overall business confidence improved by 16 percentage points from negative 5 percent to positive 11 percent, compared to the previous Wave 26 survey in October-November 2024. The Manufacturing sector led the recovery, improving from negative 3 percent to positive 15 percent, followed by the Retail/Wholesale sector, which rose from negative 18 percent to positive 2 percent in the latest survey. The Services sector maintained a steady outlook and jumped from 2 percent to 10 percent positive. 'The uptick in business confidence is a clear sign that our economic direction is on the right track. We are focused on creating a conducive environment for investment, supporting private sector growth, and ensuring long-term macroeconomic resilience,' Finance Minister Muhammad Aurangzeb was quoted as saying by the OICCI. 'The improved sentiment among businesses is both encouraging and a validation of our collective efforts.' The development comes more than a week after the International Monetary Fund (IMF) approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund. Since averting a default in 2023, the South Asian country has been making rigorous efforts to boost its economy by offering various incentives to investors, particularly from abroad. Pakistan's stocks, which rose more than 80 percent last year, have largely resisted selling pressures in recent weeks, despite the country's conflict with India that saw the two sides strike each other with missiles, drones and artillery. Commenting on the survey's findings, OICCI President Yousaf Hussain said the overall business confidence had shown a notable improvement across the business community over the past two years. 'This sharp recovery in the Business Confidence in the latest Wave 27 reflects the resilience of Pakistan's business sector and its readiness to seize emerging growth opportunities,' he said. 'It is heartening to see positive momentum across key sectors, which reflects improved sentiment and growing trust in the country's economic direction.' Hussain said there must be greater policy consistency, transparency and active engagement with key stakeholders, including OICCI members, to maintain this growing positivity in the business confidence. The BCI Wave 27 survey revealed increased optimism for the next six months, with 45 percent of the respondents expressing positive expectations. 'Key contributors to this positive outlook include economic growth, improved government policies, investment climate,' the survey report read. 'Despite the positive trend, 53 percent of the survey respondents reported a negative outlook on business conditions over the past six months, which is a substantial improvement from 66 percent negative sentiments in Wave 26. The key concerns indicated in the survey related to political stability, Rupee FX parity, Energy, and trade policies.' The BCI of foreign investors, who OICCI members randomly selected for the survey, showed a remarkable increase from positive 6 percent to 17 percent, according to the findings. This improvement is primarily attributed to better global business climate, an improved industry environment in Pakistan over the past six months, and expectations of increased capital investment in the coming six months. 'The latest BCI Wave 27 results were better than anticipated, with positive expectations reflected across all major sectors. Employment prospects, expansion plans, and investment expectations demonstrated notable gains, particularly in the Manufacturing and Retail sectors,' OICCI Secretary-General Abdul Aleem said. 'Despite notable improvement on the overall BCI, the new investment plans overall showed an improvement of 19 percent, but remained negative, which is an area of concern and needs to be addressed to further accelerate economic growth, energize large-scale manufacturing, trade and export.'
